P&A gets company back on the road to recovery

A business was under pressure from its bankers, who asked us to carry out a review. This was the second review in two years and the client was resistant, complaining about the costs and lack of benefits.

Our review found a typical scenario:

Second-generation ineffective management;

Contracting debts where final accounts had never been agreed, resulting in an aged debtor book that was eating up capital and overstating profits;

Extreme creditor pressure.

The company followed our recommendation and went into administration. The second generation MD acknowledged his inefficiencies and passed over the reins to the Contracts Manager who introduced a disciplined approach to the business.

The company exited administration and entered into a Company Voluntary Arrangement (CVA). Now several years later, the company has delivered on its CVA agreement with trade creditors and continues to prosper. All stakeholders benefited - the creditors received a dividend, employees retained their jobs, the bank retained a profitable client, as did the auditors